This guide provides a comprehensive analysis of the concept of “transshipment” under international trade law and practice. It also looks at the concept from big regional players such as US and China. It provides key insights and guidelines on how to address transshipment risk in South East Asia.
What is Transshipment?
- Transshipment is the customs-controlled transfer of goods from one means of transport to another within an intermediate location before reaching their final destination. It is a temporary procedure where the goods do not typically enter the local market of the intermediate country.
- The guide references definitions from the World Customs Organization (WCO), China Customs Law, and U.S. Customs & Border Protection, highlighting the global consistency in the concept.
Core Features and Distinctions
- Goods remain under customs supervision in bonded areas, ports, or free trade zones.
- No local importation or duties are involved unless goods are diverted.
- The process is time-bound and requires specific documentation.
- The guide distinguishes transshipment from related concepts such as transit, re-export, and indirect shipment, clarifying their differences with practical examples.
Permitted and Prohibited Actions
- Only minimal handling is allowed (e.g., sorting, inspection, basic repackaging, preservation) under customs supervision.
- Any transformation, manufacturing, or relabeling that changes the goods’ origin or classification is strictly prohibited and may constitute a violation of customs law.
Legitimate Uses and Compliance Risks
- Transshipment is used for logistics optimization, mode changes, bonded storage, and regional distribution.
- The guide warns of compliance risks such as origin fraud, duty evasion, sanctions circumvention, and forced labor evasion, providing real-world case studies (e.g., U.S. solar panels routed via Vietnam/Malaysia).
Legal Frameworks
- Outlines the legal principles from WCO, WTO, ASEAN, China, and the U.S., emphasizing the requirement that goods remain unchanged during transshipment.
- Explains the importance of Certificates of Non-Manipulation (CNM) and other documentation to prove compliance and preserve preferential origin status.
Compliance Tools and Checklist
- Provides a practical workflow for obtaining a CNM, including a template and implementation notes.
- Offers a compliance checklist detailing steps, responsible parties, and risks if requirements are not met.
Download the DFDL Transshipment Guide 2025 to strengthen your trade compliance strategy.
Author
Tony Kerr
Trade and Customs Consultant
[email protected] LinkedIn
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This publication is provided for general information only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
